Real Estate Review and Outlook

2025 confirmed the structural solidity of the real estate market, with sustained activity levels, stable prices in real terms, and a regulatory framework that continues to evolve. This year, the sector faces a stage of maturity, featuring concrete opportunities and several regulatory questions, which we analyze below.

1. Market Stability

According to various real estate activity indicators, housing prices in Uruguay remained relatively stable during 2025, with real increases being practically neutral compared to the previous year. Far from being a sign of weakness, this behavior reflects the maturity of the local market: prices are aligned with the effective purchasing power of demand, without speculative bubbles.

For 2026, projections point to annual price growth of between 3% and 5% in Montevideo, while premium areas—horizontal property developments and coastal residential strips—could record higher rates. Trends suggest that activity will remain stable and selective in 2026, without major volatility, within a context of greater balance between supply and demand.

2. Punta del Este and Metropolitan Area: Hubs of Sustained Growth

Punta del Este has demonstrated sustained growth, consolidating itself as a permanent residence destination rather than just a seasonal one. With new projects across the area and an offering that combines luxury with functionality, the sector has successfully captured both local savings and foreign investment seeking a haven of value and stability amid regional volatility.

Price firmness and the emergence of new services—such as high-quality educational centers—project a 2026 with maintained demand, driven by construction excellence and new financing modalities that facilitate property access. In the metropolitan area, the border between Montevideo and Canelones—particularly the Carrasco corridor and Camino de los Horneros—continues to be the fastest-expanding hub for gated communities and residential developments, pulled by demand for green spaces, security, and connectivity.

3. Leasing: Sustained Profitability

The rental market was one of the most dynamic segments in 2025. Residential rents recorded year-on-year increases exceeding 5%, alongside an increase in the number of active contracts. Gross rental yields in Montevideo ranged between 5% and 6% depending on the neighborhood and property type, while coastal areas focused on short-term rentals saw higher returns.

This performance consolidates the Uruguayan market as a stable investment destination, especially attractive in the face of regional insecurity. For 2026, demand is projected to remain firm, with rents evolving moderately.

4. Update to the Investment Promotion Regime

Decree No. 329/025, dated December 2025, updated the general investment promotion regime in accordance with Law 16.906, which declares the promotion and protection of investments made by national and foreign investors in the national territory to be of national interest.

Tax benefits are granted to specific companies whose investment projects involving the construction of real estate are declared "promoted" by the Executive Branch, allowing them to access exemptions from IRAE (Income Tax on Economic Activities) and Net Worth Tax. This renewal of the incentive framework is a positive signal for private investment and constitutes a pillar of growth for the sector during the current five-year period.

5. Fiscal Modifications in the National Budget Law

The National Budget Law No. 20.446, promulgated at the end of 2025, includes several key aspects for the real estate sector. Most notably, it extends the scope of the source principle to all real estate capital income; therefore, as of January 1, 2026, capital income from real estate located abroad, as well as capital gains linked to the sale of such assets, are subject to IRPF (Personal Income Tax).

Furthermore, non-resident individuals who acquire Uruguayan tax residency starting this year will be able to access a special Tax Holiday regime for up to 10 fiscal years. These modifications will require updated technical analysis by investors, developers, and advisors when structuring real estate operations.

6. Use of Cash and Prevention of Money Laundering

The Legislative Branch approved Law No. 20.469, which introduces amendments to the Comprehensive Anti-Money Laundering Law (Law No. 19.574). It reduces the cap for cash use—previously set at 1,000,000 UI by the 2020 LUC (approx. USD 160,000)—establishing it at 200,000 UI or 5% of the total operation value, with a ceiling of 450,000 UI (approximately USD 32,000 and USD 72,000, respectively).

This change has direct consequences for the real estate sector, as it reinforces the obligations of non-financial obligated entities—including notaries, real estate agencies, and developers—in line with international standards for preventing money laundering and the financing of terrorism.

7. Legislative Initiative: Restriction on Studio Apartments

On the local regulatory front, the real estate sector is closely monitoring a legislative initiative that seeks to restore a minimum floor area of 35 square meters for homes built under the Social Interest/Promoted Housing regime, effectively eliminating or restricting the construction and sale of studio apartments (monoambientes). The proposal, questioned by the private sector, requires that every new home have at least one separate bedroom to safeguard privacy.

8. New Investment Models and Senior Living

The sector that manages to innovate and best understand the end user will be the one that grows even in complex scenarios. Significant opportunities are emerging in new real estate investment models focused on efficiency, quality of life, sustainability, and applied technology—a trend identified by developers as a major turning point in the local market.

One of the most notable innovations is the rise of housing projects for older adults—known as Senior Living—with exclusive developments for those over 60, introducing a concept previously unseen in the Uruguayan market. In a country with one of the oldest demographic profiles in Latin America and a middle class with purchasing power, this typology represents a long-term opportunity with high replication potential.

9. Real Estate Operators

Law No. 20.380, which came into force in 2025, created the National Registry of Real Estate Operators, which is mandatory for all brokers, agents, commission agents, and companies in the sector. It is managed by a commission within the Ministry of Education and Culture. The law establishes licensing and training requirements for the practice of the profession, aiming to raise industry standards.

In 2026, the challenge lies in the full implementation of the registry and the final regulation of its operational aspects—including the sanctions regime—to fulfill the spirit of the law: greater professionalism, protection of competition, transparency in transactions, and consumer protection.

10. Mortgage Credit

Mortgage credit continued to grow in 2025, bolstered by both public and private banking. The Banco Hipotecario del Uruguay (BHU) concentrates approximately two-thirds of the market, while major private banks have gained ground by offering attractive interest rates, greater flexibility, and more agile processes.

The increased bancarization of transactions, combined with the strengthening of the financing ecosystem—including the "Entre Todos" program from the Ministry of Housing, which enables financing of up to 95% of the property value through BHU—could be a decisive lever to expand homeownership access for middle and lower-middle-class sectors.

11. Real Estate Crowdfunding and Asset Tokenization

The real estate sector is beginning to explore new forms of investment that were unthinkable until recently. On one hand, real estate crowdfunding allows any individual to invest in a construction or acquisition project by contributing small amounts through digital platforms, sharing both risk and profit among many investors.

On the other hand, real estate tokenization takes this concept a step further: using blockchain technology, a property can be divided into digital fractions—tokens—that represent rights over that asset and can be traded efficiently. In Uruguay, both modalities are in their infancy, and their development will require adapting the existing legal framework under the supervision of the Central Bank. These trends aim for the same goal: making "brick and mortar" investment accessible to medium-sized savers and investors rather than being exclusive to high-capital individuals.